No more de­lays: What to know about the July 15 tax dead­line

Merced Sun-Star - - News / Weather - BY SARAH SKID­MORE SELL

It’s time to do your taxes – no more de­lays.

As the coro­n­avirus pan­demic took hold this spring, the fed­eral gov­ern­ment post­poned the tra­di­tional April 15 fil­ing dead­line un­til July 15.

The move pro­vided some eco­nomic and lo­gis­ti­cal re­lief for tax­pay­ers deal­ing with the dis­rup­tions and uncer­tainty brought on by lock­downs, school clo­sures and shut­tered busi­nesses. But now that new dead­line is just a day away.

Tax­pay­ers must file or seek an ex­ten­sion by the new dead­line or face a penalty. The IRS is ex­pect­ing about 150 mil­lion re­turns from in­di­vid­u­als and as of last count, it had re­ceived al­most 142 mil­lion.

So for those of you still wait­ing to file, make a pay­ment or with other ques­tions, a few an­swers:

Q: Do I have to?

A: Yes. In most cases, you must file and pay your taxes by July 15.

Tax­pay­ers who need more time can re­quest an ex­ten­sion on the IRS web­site. That will give them un­til Oct. 15 to file. How­ever, an ex­ten­sion to file does not mean added time to pay. So those plan­ning on fil­ing later should es­ti­mate what they owe and make that pay­ment by

July 15.

Q: I can’t pay now, what do I do?

A: Go ahead and file your taxes even if you can­not pay.

The IRS is will­ing to set up pay­ment plans or make other ar­range­ments with tax­pay­ers who can­not pay in full. Many of those can be set up on­line. And the penalty for fail­ure to file will be much more ex­pen­sive than the fail­ure to pay, says Kathy Pick­er­ing, chief tax of­fi­cer at H&R Block.

Q: What about re­funds?

A: The IRS is still pro­cess­ing and is­su­ing re­funds, most within 21 days.

Those get­ting re­funds will be paid in­ter­est, dat­ing back to April 15, if they file on time. The in­ter­est rate is 5% per year through June 30. Start­ing July 1, it drops to 3% per year. The in­ter­est is com­pounded daily for re­funds. Any re­fund is­sued af­ter July 1 will get a blended rate.

Q: I don’t want to go to any­where. Can I do this on­line?

A: Yes, you can file or pay your taxes on­line – in fact, it could be the way to go to avoid a de­layed re­fund for 2019. The IRS urges tax­pay­ers to use elec­tronic op­tions to sup­port so­cial dis­tanc­ing and speed the pro­cess­ing of re­turns, re­funds or pay­ments. The agency is still work­ing its way through an es­ti­mated back­log of 12 mil­lion pieces of mail that built up dur­ing its clo­sure in re­sponse to the pan­demic.

Ac­coun­tants and tax prepa­ra­tion ser­vices say they have a va­ri­ety of means to help peo­ple pre­pare their taxes with­out meet­ing face to face.

Q: What about es­ti­mated taxes?

A: Tax­pay­ers who make es­ti­mated quar­terly tax pay­ments have un­til July 15 to make the pay­ments for the first and sec­ond quar­ter. Those were orig­i­nally due on April 15 and June 15 re­spec­tively.

Q: What else?

A: There are a host of other tax dead­lines linked to July 15. Check out the IRS web­site or reach out to a tax pro­fes­sional for an­swers to your spe­cific ques­tion.

One worth not­ing is that July 15 is also the dead­line to claim a re­fund for 2016 tax re­turns. An es­ti­mated $1.5 bil­lion re­funds for 2016 are sit­ting un­claimed be­cause peo­ple failed to file tax re­turns. The law pro­vides a three­year win­dow of op­por­tu­nity to claim a re­fund. But if tax­pay­ers do not file a re­turn within that time, the money be­comes prop­erty of the Trea­sury.

There is no penalty to file a later re­turn if a re­fund is due.

It’s also a good time to check in with a tax pro­fes­sional if you have had a ma­jor shift in in­come, em­ploy­ment or other tax sit­u­a­tions in 2020. With all the changes stem­ming from the COVID-19 pan­demic, there may be need for added help when it comes to taxes.

“Reach out to (your tax pro­fes­sional) about what 2020 is go­ing to look like,” says Michael Eisen­berg, a CPA and at­tor­ney at Squar Mil­ner in Los Angeles.

THE IRS IS EX­PECT­ING ABOUT 150 MIL­LION RE­TURNS FROM IN­DI­VID­U­ALS.

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